Qualifying Offers For Free Agents

A few months from now, when the season ends and players file for free agency, teams, agents and players will navigate a new system for determining free agent compensation. Here’s a brief primer on compensation under the sport’s new collective bargaining agreement:

Type A and Type B designations have been eliminated. Instead, teams will have to make players a qualifying offer to be eligible for draft pick compensation.

The qualifying offer, which will be determined by averaging the top 125 player salaries from the previous year, is expected to fall in the $12-13MM range for the coming offseason. All qualifying offers are for the same duration (one year) and the same amount ($12-13MM).

Teams will have until five days after the World Series to make qualifying offers and the players will have seven days to accept.

Once a team makes a qualifying offer, the player has two choices: he can accept the one-year deal or decline in it search of other offers. If he declines the offer and signs elsewhere, his new team will have to surrender a top draft pick (the selection doesn't go to the player's former team).

Teams that sign free agents who turned down qualifying offers will surrender their first round picks. However, the forfeited picks don't go to other MLB teams. Instead, the first round simply becomes condensed.

The first ten selections in the draft are protected. Teams with protected picks will surrender their second-highest selections.

The player’s former team will receive its compensatory selection at the end of the first round. Teams now obtain one compensatory selection, instead of two.

If teams don’t make a qualifying offer, the player can sign uninhibited.

Only players who have been with their clubs for the entire season will be eligible for compensation.

One question: if a team signs two “free agents who turned down qualifying offers” (btw this needs a catchier name, like “Type A”) how will priority for 1st vs 2nd round draft pick be determined? Under the old system, the first pick went to the higher Elias ranked player.

If a team signs 2 qualifying free agents, the teams that lose the player will draft according to their previous year’s winning percentage. So the team signing them will give their 1st round pick to the lesser team (if not protected), and their 2nd round pick to the better team.

QUESTION – about the line: “Only players who have been with their clubs for the entire season will be eligible for compensation”

Suppose you have a player like Johnny Damon: signed to a current deal that expires at the end of the year, but signed after the season started. [Let’s pretend for a second that he could possibly be worth $13m or so.]

For players like him whose contracts expire at season’s end, does that line mean that they are free agents immediately and that neither: (a) the ‘Qualifying Offer’ bit cannot apply, nor (b) would their current teams be eligible any compensation picks under any scenario? That’s what I think I’m reading from it, anyway.

Sure there is. Think of a “Peyton Manning” situation – a free agent with questions about whether a medical report would ever allow him to play his sport again. A guy like that would only get low-ball offers due to the risk (and might choose to reject them) until getting medical clearance.

The original question is… due to the line about being with the club for an entire season… would Oswalt be eligible to RECEIVE a qualifying offer? He was technically NOT with the team for the whole year, since he wold have signed in May/June.

The problem is that it automatically puts the smaller market teams at an even bigger disadvantage. Teams like the Pirates, Pads, Oakland etc wont be able to throw out 12 and 13 million dollar tenders like its cool.